What you say is true (meaning that you have correctly stated the FAA's contention) but the FAA never provided any indication of why they felt that way. NavWorx tested the unit in simulations of exactly the conditions that were supposed to be a problem (failed satellites), and it worked fine. The FAA was never clear as to why they felt those tests were not sufficient, or what other testing they would like to see.
Also, the NavWorx TSO is for TSO-154 which covers the GPS performance in great detail without also requiring that the GPS itself be certified to TSO-145 as a stand-alone product. The FAA (in 2013) accepted that. The FAA (since 2016) seems to think that the GPS can't possibly be "good enough" if it isn't certified to TSO-145 as a stand-alone product. But this is a shackle that they appear to have applied only to NavWorx. No other manufacturer is being held to this standard, and now the trend is towards non-TSO products entirely.
That is what makes me think that much of this issue centers on interpersonal issues rather than technical merits. And we all suffer for it.
In all of the UPN/NPRM/AD supporting material, I never saw a single thing from the FAA that made any such shortcoming "clear" to me. The only 'failure' I found was that the product did not have TSO-145 certification (which is not required for TSO-154). And, of course the EXP unit was never sold as TSO-154 at all.